Camper Company and McSead, Inc., are the two largest toy companies. Condensed liabilities and stockholders' equity from a recent balance sheet are shown for each company as follows: Camper McSead Current liabilities $1,778,000 $3,907,000 Long-term debt 958,000 2,294,600 Total liabilities $2,736,000 $6,201,600 Total stockholders' equity 4,560,000 7,752,000 Total liabilities and stockholders' equity $7,296,000 $13,953,600 The income from operations and interest expense from the income statement for both companies were as follows: Camper McSead Income from operations before tax $675,480 $2,344,840 Interest expense 52,000 192,200 a. Determine the debt ratio for both companies. Round to one decimal place. Camper fill in the blank 1 % McSead fill in the blank 2 % b. Determine the ratio of liabilities to stockholders' equity for both companies. Enter your answers as decimal values rounded to one decimal place. Camper fill in the blank 3 McSead fill in the blank 4 c. Determine the number of times interest charges are earned for both companies. Round to one decimal place. Camper fill in the blank 5 McSead fill in the blank 6
Camper Company and McSead, Inc., are the two largest toy companies. Condensed liabilities and stockholders' equity from a recent balance sheet are shown for each company as follows: Camper McSead Current liabilities $1,778,000 $3,907,000 Long-term debt 958,000 2,294,600 Total liabilities $2,736,000 $6,201,600 Total stockholders' equity 4,560,000 7,752,000 Total liabilities and stockholders' equity $7,296,000 $13,953,600 The income from operations and interest expense from the income statement for both companies were as follows: Camper McSead Income from operations before tax $675,480 $2,344,840 Interest expense 52,000 192,200 a. Determine the debt ratio for both companies. Round to one decimal place. Camper fill in the blank 1 % McSead fill in the blank 2 % b. Determine the ratio of liabilities to stockholders' equity for both companies. Enter your answers as decimal values rounded to one decimal place. Camper fill in the blank 3 McSead fill in the blank 4 c. Determine the number of times interest charges are earned for both companies. Round to one decimal place. Camper fill in the blank 5 McSead fill in the blank 6
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Camper Company and McSead, Inc., are the two largest toy companies. Condensed liabilities and
| Camper | McSead | |||
| Current liabilities | $1,778,000 | $3,907,000 | ||
| Long-term debt | 958,000 | 2,294,600 | ||
| Total liabilities | $2,736,000 | $6,201,600 | ||
| Total stockholders' equity | 4,560,000 | 7,752,000 | ||
| Total liabilities and stockholders' equity | $7,296,000 | $13,953,600 |
The income from operations and interest expense from the income statement for both companies were as follows:
| Camper | McSead | |||
| Income from operations before tax | $675,480 | $2,344,840 | ||
| Interest expense | 52,000 | 192,200 |
a. Determine the debt ratio for both companies. Round to one decimal place.
| Camper | fill in the blank 1 % |
| McSead | fill in the blank 2 % |
b. Determine the ratio of liabilities to stockholders' equity for both companies. Enter your answers as decimal values rounded to one decimal place.
| Camper | fill in the blank 3 |
| McSead | fill in the blank 4 |
c. Determine the number of times interest charges are earned for both companies. Round to one decimal place.
| Camper | fill in the blank 5 |
| McSead | fill in the blank 6 |
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